Government-insured U.S. mortgages highest since 1990
NEW YORK (Reuters) - U.S. mortgage loans insured by the U.S. government leaped in June to the highest share of total loan applications in nearly two decades, the Mortgage Bankers Association said on Thursday.
Borrowers taking loans through the Federal Housing Administration and Veterans Administration usually pay a lower downpayment than for other mortgages.
The share of government-insured loans jumped to 35.9 percent in June -- the highest since November 1990 -- from 25.7 percent in May 2009 and 27 percent in June 2008.
The lowest share since the industry group began tracking applications weekly in January 1990 was 5.8 percent in August 2005.
"A primary reason government-insured loans have retained a high share of the purchase market is that these loans typically require lower downpayments than conventional loans," Orawin Velz, associate vice president of economic forecasting at the MBA said in a statement.
"In addition, lending standards tend to be tighter for conventional loans, especially for loans that require private mortgage insurance," she said.
The government-insured share of loan applications to buy homes rose to 38.6 percent last month from 27.8 percent a year ago. The record low was 6.8 percent in August 2005.
Demand for refinancing loans through the government programs has been more volatile than purchase requests, based on sharp swings in interest rates, the MBA said.
(Reporting by Lynn Adler; Editing by Padraic Cassidy)
